Market review: the index remained in a narrow range, with a large margin of turnover
In terms of the market, the Wande all a index fluctuated and consolidated in the past five trading days, with a cumulative slight increase of 0.52%. The marginal volume of turnover and activity increased slightly again, with a total net inflow of 5.71 billion yuan this week. In the past five trading days, nonferrous metals, steel, food and beverage, medicine and biology, commercial trade and other sectors led the increase; Media, banking, national defense and military industry, agriculture, forestry, animal husbandry and fishery, leisure services and other sectors led the decline.
In October, the profits of industrial enterprises continued to rise, and the profit differentiation between upstream and downstream has not been significantly improved
According to data released by the National Bureau of statistics on the 27th, in the first 10 months of this year, industrial enterprises above Designated Size achieved a total profit of 7164.99 billion yuan, a year-on-year increase of 42.2%, an increase of 43.2% over the same period in 2019, and an average increase of 19.7% over the two years. From the month of October, the profits of Industrial Enterprises above designated size increased by 24.6% year-on-year, 8.3 percentage points faster than that of the previous month, rising for two consecutive months. Among them, the profit of high-tech manufacturing industry increased by 17.4% year-on-year, continuing the double-digit growth trend, and continuing to contribute to the optimization of industrial economic structure and the realization of transformation and upgrading. With the implementation of energy supply guarantee policies and measures, the coal output increased rapidly in October, driving the profit of the coal industry to increase by 4.38 times year-on-year, 69.6 percentage points higher than that of the previous month; The profits of nonferrous metals and chemical industries increased by 1.68 times and 63.9% respectively, 71.3 and 21.7 percentage points higher than that of the previous month; The profit of the iron and steel industry increased by 57.3%, maintaining rapid growth. The profit of consumer goods manufacturing industry increased by 3.6% from a year-on-year decrease last month, of which more than 70% of the profit of consumer goods manufacturing industry rebounded. We believe that at present, the pressure on the cost side of downstream industries is still obvious, but the policy of “ensuring supply and stabilizing price” has begun to gradually stabilize the price of upstream raw materials. Cross cycle adjustment may focus on reducing costs and relieving the middle and downstream industries, so as to promote the gradual restoration of profit space in the middle and downstream manufacturing and end consumer industries.
The United States will release strategic oil reserves, but this may be difficult to reverse the tight pattern of supply and demand
In order to alleviate the mismatch between supply and demand of crude oil in the process of economic recovery and reduce oil prices, US President Biden announced early Wednesday morning Beijing time that 50 million barrels of crude oil would be released from strategic oil reserves, hoping that the problem of rising oil prices would be solved soon. According to the U.S. Department of energy, these crude oil will be put on the market as early as mid and late December this year, of which 18 million barrels have been approved by Congress for direct sales, and the other 32 million barrels belong to short-term exchange. After the oil price is stable, it is agreed to return the strategic oil reserve from 2022 to 2024. At the same time, the United States will also work with India, Japan, South Korea and the United Kingdom to release strategic reserves. We believe that the coordinated release of strategic reserves by the United States, Britain, Japan, South Korea and India may be difficult to change the tight market supply pattern. First, the manufacturing data of European and American countries are still strong. The manufacturing PMI of the United States, the euro zone and the United Kingdom rose again in November, showing that production continues to expand and the pressure on oil demand is difficult to slow down in the short term. Second, supply side constraints restrict the further release of oil production capacity. The rapid energy transformation and insufficient long-term investment have significantly reduced the fossil energy production capacity in Europe and the United States, and the release space is relatively limited. Third, the short-term release of strategic reserves is not sustainable. It is more meaningful to force OPEC + to reconsider the production increase plan. It is expected that it is difficult to fill the current supply-demand gap by relying on strategic reserves alone. To sum up, on the premise of sustained economic recovery in Europe and the United States, oil prices may remain high, but the development of overseas epidemic is still the biggest uncertain factor, which needs continuous attention.
The discovery of a new covid-19 virus variant in southern Africa has triggered a rise in global risk aversion
On November 26 local time, the World Health Organization held an emergency meeting to focus on the new covid-19 virus variant B.1 found in southern Africa 1.529 “Omicron”, experts said that the mutant has a large number of mutations, may be more infectious than Delta, and has begun to spread to other parts of the world. At present, many countries or regions have announced travel restrictions on Southern Africa. The news also triggered concerns in the global market. The main stock indexes of the US, Europe and Asia Pacific stock markets fell sharply that day. The US dollar index fell 0.75% and was close to 96.0. The main contract of us oil fell 13.04%, oil distribution fell 11.27%, and the long-term yield of us bonds fell 15.81 basis points to 1.482%. At present, the global epidemic trend is still the biggest uncertain factor affecting the global economic recovery and liquidity changes. Recently, there has been an obvious anti attack trend of winter epidemic in European and American countries. The emergence of African mutant undoubtedly further intensified the global risk aversion, and then brought about the sharp fluctuation of overseas asset prices on Friday.
The following aspects need to be focused on: first, if the new mutant impacts the overseas economic repair, the interest rate increase plan and pace of overseas central banks may be disrupted and the urgency of policy tightening will be reduced. Whether the impact comes from the upstream supply chain or the job market, the supply of overseas markets will be frustrated again, but the more serious impact may lie on the demand side. In the current macroeconomic situation, it is difficult to restart the unlimited easing policy. Under the previous comprehensive subsidies, it is difficult to reproduce the problem of rising prices caused by the recovery of Chinese demand before supply in Europe and the United States. The decline of oil prices driven by weak demand also weakens the core driving force for the sustained rise of inflation in Europe and the United States, Thus, it gives more policy options to the Federal Reserve, which is “easy to loosen but difficult to tighten”, and reduces the urgency of raising interest rates. Second, China’s export downward pressure or marginal slowdown, but it is difficult to change the downward trend. In the past year, China’s export continued to increase rapidly, mainly due to the mismatch between overseas supply and demand. After several rounds of epidemic, overseas countries have significantly increased their attention to supply chain security, and the resilience of the manufacturing industry has also improved. It may be difficult to obtain comprehensive subsidies at the demand side, and the supply gap is limited, which makes the external demand pull of China’s export less than before. Secondly, Port congestion in Europe and the United States has not improved, or it will also restrict China’s exports. Third, the relaxation of China’s monetary policy and the expected strength may drive a new wave of trend market opportunities. The resurgence of the epidemic is expected to drive the global commodity prices down, the tightening pressure of overseas central banks slows down, which makes China’s monetary policy more independent, the pressure of “inflation” is further relaxed, and China’s Cross cycle adjustment can focus more on “stagnation”. In this context, undervalued sectors and high boom growth tracks may have better opportunities. Of course, the focus should still be on tracking and paying attention to the follow-up development of overseas epidemics, the specific response measures of overseas countries, and their impact on the logic of global inflation.
Weekly view: focus on the profit repair opportunities of undervalued sectors in balanced allocation
At the macroeconomic level, the tone of macro-control with the word “stability” in the near future has become clearer and clearer. In 2021, China’s economic growth as a whole showed obvious characteristics of “high in the front and low in the rear”. At the current stage, it once again emphasizes “cross cycle” adjustment and connection. Its main foothold may be “stable growth”, with policy oriented support supporting the bottom, stable export, stable employment and stable operation of small and medium-sized enterprises as the key driving force. Therefore, the policy “combination fist” may be introduced more intensively later to provide support for maintaining reasonable and abundant market liquidity. Secondly, the macro credit cycle may enter the expansion stage. Under the key layout of “specialization and special innovation”, among the hot topics such as digital economy, energy transformation and new materials, small and medium-sized enterprises with technological and innovation advantages may further obtain targeted credit support, which is expected to usher in a period of vigorous development opportunities. It is recommended to pay attention.
In terms of the market, the Wande all a index has maintained a narrow shock trend in the past five trading days, the structural market continues, the rotation speed of the plate is accelerated, the market hot spots are switched quickly, and the sustainability is poor, which is in line with the general trend in last week’s weekly report. In terms of the industry, the food and beverage, medicine and biology sectors all performed strongly this week. The repair power of the iron and steel industry was obvious. The Rare Earth Theme under the concept of “energy conservation and efficiency” ranked among the top. The individual stocks of the meta universe concept fluctuated violently and experienced a deep correction during the week. The performance of the industry was basically in line with our configuration suggestions in the previous period.
At present, the liquidity of A-Shares is basically stable, the margin of broad credit and broad currency expectation is stronger, and the valuation of hot concept plates with high prospect, such as new energy, carbon neutralization and common prosperity, has entered a high level, and the exploration space may be relatively limited in the short term. The overall valuation differentiation of the market is still obvious, the main line is still unclear, and the probability will continue the structural market in the short term. However, under the background of the continuous strengthening of loose expectations, the trend market opportunities are still worth looking forward to. It is suggested to maintain the balanced allocation and pay attention to the undervalued blue chip targets whose performance is expected to be repaired, as well as the undervalued sub circuits with high prosperity in the growth style.
In terms of industry, (1) Under the influence of the sharp rise in commodity prices, the profit space of the steel sector has continued to shrink, and the valuation of the sector has been at a historically low level. At the same time, the carbon peak scheme of the steel industry is about to be implemented recently, the tightening trend of output under the background of dual control of energy consumption is difficult to change, and the steel output has declined significantly, and the social inventory continues to be consumed. With the marginal relaxation of the real estate credit policy and The acceleration of the issuance of special bonds at the end of the year will drive the development of infrastructure, and the demand for steel replenishment may strengthen, driving the gradual improvement of the profitability of the steel sector. It is suggested to pay attention to individual stock targets with strong capacity support under the constraint of dual control quota of energy consumption. 2) Under the joint action of factors such as the gradual recovery of end consumer demand at the end of the year, the slowdown of cost pressure and the continuous rise of product prices, the mass consumption sector may present better allocation opportunities. It is suggested to take consumption upgrading and valuation repair as the underlying logic, mine quality and excellent targets and choose the right layout. 3) At present, most of the valuations of the pharmaceutical and biological sub sectors have been bottomed. Under the influence of factors such as the controlled decline of upstream prices, the successive introduction of centralized purchase specifications and the strengthening of supervision, it is recommended to pay attention to the opportunities brought by the performance growth of leading targets in sub sectors such as API. In addition, the resurgence of the epidemic in winter and the emergence of new mutant strains will maintain a high growth rate in vaccine, covid-19 detection and other sectors. It is recommended to pay attention. 4) The concept of metauniverse has been very popular recently. The stock prices of individual stocks in the sector have soared. Although there has been a correction this week, the overall valuation is still high. We once again emphasize the rational response to the market “tuyere”. It is suggested to carefully control the positions of individual stocks related to metauniverse in the short term in combination with the performance cashing ability of specific stock targets and considering the current risk level. 4) With the policy marginal relaxation and stronger expectation, the valuation of non bank financial sector is expected to be repaired, so it is recommended to pay attention.
Medium and long term strategy
In the medium and long term, we suggest investors continue to focus on three directions. Consumption sector: medicine and consumption upgrading. Long term high-quality track: carbon neutralization, scientific and technological innovation and new infrastructure. Stable bottom position variety: big finance.
Risk statement
Global liquidity tightened more than expected; The global epidemic situation has exceeded expectations; Macroeconomic growth fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
